Mortgage Rates Erase Half Their Gains Since Mid-January

Mortgage rates trended lower over the past week, touching their lowest levels since the last few days of May, which themselves were the lowest rates since the middle of April. Mortgage rates have now given up about half of the increase they had seen since the middle of January.

Incoming economic data – including inflation and retail sales numbers – were generally strong, which should have pushed rates higher. But comments from Federal Reserve Chair Jerome Powell in  testimony before Congress suggested a slightly less hawkish monetary policy stance than had been expected.

More importantly, escalating trade woes and weak housing numbers have piqued fears among some market watchers that a general slowdown could be on the horizon.

Over the coming week, markets are likely to pay more attention to housing data than they would have otherwise given fears that the sector may be slowing. Mortgage rates could dip further if housing data come in particularly weak; Zillow expects June existing and new home sales , out next week to show small declines from May.